Dairy Processing - November/December 2022 - 17

Who participated
Primary products
Cheese 50%
Cultured products/
yogurt 35%
Ice cream 33%
Fluid milk 32%
Frozen desserts 21%
Company-wide annual sales
1-4.9
16%
1-4.9
50%
100+
$MIL
50-99
9%
5-19
12%
20-49
13%
their existing products as they could.
" Much like we see across other vertical sectors
of the food processing industry, there was just that
all-out attempt to keep their existing products on
the shelves as consumers were really eating a lot
at home, " Hellmer said. " And so R&D just pulled
back in some of those truly key areas of innovation
and invention. Now, as the business impacts of
the pandemic have slowed, as processors look
ahead to next year, the activity within product
development is shifting back into high gear. "
formulation cost savings. Prior to 2020, 65%
of respondents said these cost savings were a
priority. Looking ahead over the next year, that
number jumped to 81%.
" During the height of the pandemic, we can
see just overall this dramatic reduction in R&D
department activity, " Hellmer said. " Everything
kind of pulled back, except for cost savings,
which started to bump up. Innovation just
really shrank as a company focus. Even
formulation took a big hit, almost a 10-point
hit from pre-pandemic to the height of the
pandemic levels. "
During the pandemic, there was a dramatic
pullback in invention-related product
development initiatives. Dairy processors were
shifting their attention to produce as many of
A FOCUS ON COST SAVINGS
Despite a reprieve from the pandemic-related
pressures, 49% of survey participants cite cost
savings as a primary reason as to why there
is a lesser focus on new product innovation
in the next 12-18 months. Just under 20% of
participants also cited inflationary pressures.
" The industry's commitment to cost savings
is stronger than seen at any time in the past four
years, " Hellmer said. " That's the main driver for
keeping that focus, for not returning full steam
to invention or innovation. "
Additionally, approximately three in 10
professionals reported that their companies are
challenged in the area of product development
as it's tied to challenges with lack of labor or
limited capacity and having fewer internal R&D
resources, which will affect a company's ability
to develop products.
As far as where dairy processors are looking
to put their product development attention next
year, Hellmer said it will still be with one eye
on cost savings and supplier rationalization and
then also looking at innovation and formulation
driven initiatives.
" I think that that's what this study is telling
us, " Hellmer said. " Pre-pandemic, that major
product development focus was on innovation,
on invention, and now it's on cost savings,
supplier rationalization, and then with another
eye toward invention and formulation. So,
it's a different world now within product
development, at least for the next year. "
Dairy Processing will be hosting a webinar
in early 2023 that will cover the Cypress
Research survey in-depth. Please visit www.
dairyprocessing.com for details.
16 NOV-DEC 2022 | DAIRYPROCESSING.COM
Source: Cypress Research, Photo: ©Artem Zakharov-stock.adobe.com
http://www.dairyprocessing.com http://www.DAIRYPROCESSING.COM
Dairy Processing - November/December 2022

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